A team would soon be visiting Switzerland to hold talks with the Swiss authorities in an effort to unearth unaccounted for money stashed away by Indian nationals, Finance Minister Pranab Mukherjee has said.
The government has finalised dates to renegotiate existing treaties with Switzerland and Belgium to broaden the scope for bringing back money parked illegally by Indians in foreign banks.
"So far, the efforts to unearth the unaccounted money stashed elsewhere, we have taken initiatives. In respect of Switzerland, I think the team is going on 10th and 11th of this month. We are engaged in discussion with the Swiss authorities. We want to amend the Avoidance of Double Taxation agreement."
"Of course in a large number of countries the appropriate clause will be inserted through which you can get the necessary information to locate the tax evaders and to have the facilities of recovering the tax because up to now we did not accept the OECG clause of exchanging information. But now we have become a party to it and Swiss authorities have agreed to negotiate. The negotiations will begin from this month itself," Mukherjee told media persons on the sidelines of Editors' Conference 2009 in the national capital.
Govt trying to prevent smuggling of goods
Mukherjee said that the government had received information about entry of goods into the country through smuggled routes and the government was trying to plug that.
"If there is regular credit and if they try to dump, any country, not only China, any country tries to dump their products in a country by selling it at an unusually low price, then there is a regular institutional mechanism to deal with it through anti-dumping mechanism. But if there is smuggling, informal trade, prevention is the best way to prevent this smuggling and there the Directorate of Enforcement and various other governmental agencies are there, state government also has agencies. But, we are told that some goods are coming through smuggled routes and we are trying to prevent that," said Mukherjee.
China and some South East Asian countries are becoming a major source of worry for Indian revenue intelligence agencies.
The authorities say some Chinese manufacturers are evading anti-dumping duty their goods would have attracted in European Union countries, by routing the same through India.
'Country of Origin Fraud' is increasingly attracting the attention of customs enforcement authorities across the world.
In fact, one such case brought a European Anti-Fraud Office (OLAF) team to India last year on suspicion that some goods, imported by EU countries from India, were actually of Chinese origin, sources said.
Mukherjee also defended the Reserve Bank of India's recent purchase of gold worth $6.7 billion.
"We have money to buy gold. We have enough foreign exchange reserves by which we can meet our import requirements. This flow to foreign exchange reserves is continuing because people have confidence on the resilience of Indian economy," said Mukherjee.
The International Monetary Fund has sold 200 tonnes of gold to the RBI for $6.7 billion, quietly executing half of a long-planned bullion sale that has threatened to slow gold's ascent.
The RBI said the purchase was an official sector off-market transaction and was executed during Oct 19-30 at market-based prices.
An IMF official said the sale was concluded at an average price of about $1,045 an ounce and that the transaction would be paid in hard currency and not in IMF Special Drawing Rights.
The deal, which surprised traders who expected China to be the most likely buyer, will relieve the gold market of some uncertainty over how and when the IMF would sell 403.3 tonnes of gold, about one-eighth of its total stock. The deal will increase India's gold holdings to the tenth largest among central banks.
On runaway prices of foodgrain, vegetables and other essential commodities, Mukherjee said there were measures to shield the poor from the impact of inflation.
"I understand the sufferings of the common people. I understand that if the daily essentials, prices of essential commodities increase and if it goes beyond the reach of them, naturally everybody will suffer. But these are certain factors which we cannot ignore. To provide relief to the more vulnerable section of the society, we have this system of differential treatments where those (whose) incomes are less, to give them subsidised items through public distribution system," said Mukherjee.
